Present Worth of Annuity Calculator

✖Annuity is a financial product or arrangement that involves a series of periodic payments or receipts made at equal intervals.ⓘ Annuity [A]			+10% -10%
✖Discrete Compound Interest Rate rate refers to the interest that is calculated and compounded at specific, discrete intervals during a given period, rather than continuously.ⓘ Discrete Compound Interest Rate [i]			+10% -10%
✖The number of interest periods, often denoted as n, represents the total count of compounding periods within a specified time frame for an investment or loan.ⓘ Number of Interest Periods [n]			+10% -10%

✖The Present Worth of an Annuity is a financial metric that represents the current value of a series of equal cash flows or payments received or paid at regular intervals over time.ⓘ Present Worth of Annuity [P]

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Formula

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Present Worth of Annuity

Formula

`"P" = "A"*(((1+"i")^("n")-1)/("i"*(1+"i")^("n")))`

Example

`"1859.41"="1000"*(((1+"0.05")^("2")-1)/("0.05"*(1+"0.05")^("2")))`

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Present Worth of Annuity Solution

STEP 0: Pre-Calculation Summary

Formula Used

Present Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate*(1+Discrete Compound Interest Rate)^(Number of Interest Periods)))
P = A*(((1+i)^(n)-1)/(i*(1+i)^(n)))
This formula uses 4 Variables

Variables Used

Present Worth of an Annuity - The Present Worth of an Annuity is a financial metric that represents the current value of a series of equal cash flows or payments received or paid at regular intervals over time.
Annuity - Annuity is a financial product or arrangement that involves a series of periodic payments or receipts made at equal intervals.
Discrete Compound Interest Rate - Discrete Compound Interest Rate rate refers to the interest that is calculated and compounded at specific, discrete intervals during a given period, rather than continuously.
Number of Interest Periods - The number of interest periods, often denoted as n, represents the total count of compounding periods within a specified time frame for an investment or loan.

STEP 1: Convert Input(s) to Base Unit

Annuity: 1000 --> No Conversion Required
Discrete Compound Interest Rate: 0.05 --> No Conversion Required
Number of Interest Periods: 2 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

P = A*(((1+i)^(n)-1)/(i*(1+i)^(n))) --> 1000*(((1+0.05)^(2)-1)/(0.05*(1+0.05)^(2)))

Evaluating ... ...

P = 1859.410430839

STEP 3: Convert Result to Output's Unit

1859.410430839 --> No Conversion Required

FINAL ANSWER

1859.410430839 ≈ 1859.41 <-- Present Worth of an Annuity

(Calculation completed in 00.004 seconds)

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< 9 Interest and Investment Costs Calculators

Present Worth of Annuity

Go Present Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate*(1+Discrete Compound Interest Rate)^(Number of Interest Periods)))

Present Worth with Salvage Value of Equipment at 2nd Year Investment

Go Present Worth = Purchase Cost of Equipment-(Annuity)/(1+Interest Rate per Period)-(Annuity)/(1+Interest Rate per Period)^(2)+Salvage Value of Equipment

Future Worth of Perpetuity

Go Future Worth of a Perpetuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/((Discrete Compound Interest Rate)))

Future Worth of Annuity

Go Future Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate))

Capitalized Cost

Go Capitalized Cost = Original Cost of Equipment+(Replacement Cost/((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1))

Future Worth of Annuity given Present Annuity

Go Future Worth of an Annuity = Present Worth of an Annuity*((1+Discrete Compound Interest Rate)^(Number of Interest Periods))

Present Worth for Initial Replacement

Go Present Worth = (Replacement Cost/((1+Interest Rate per Period)^(Number of Interest Periods)-1))

Replacement Cost

Go Replacement Cost = Original Cost of Equipment-Salvage Value of Equipment

Present Worth of Perpetuity

Go Present Worth of a Perpetuity = Annuity/Discrete Compound Interest Rate

Present Worth of Annuity Formula

What is Investment Cost ?

Investment costs, also known as capital costs or capital expenditures, refer to the expenses incurred by individuals, businesses, or organizations to acquire, upgrade, or maintain physical assets or financial instruments with the expectation of generating future income, appreciation, or other benefits. These costs are typically associated with long-term investments aimed at enhancing productivity, generating revenue, or achieving specific strategic goals.

How to Calculate Present Worth of Annuity?

Present Worth of Annuity calculator uses Present Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate*(1+Discrete Compound Interest Rate)^(Number of Interest Periods))) to calculate the Present Worth of an Annuity, The Present Worth of Annuity, often denoted as is a financial metric that represents the current value of a series of equal cash flows or payments received or paid at regular intervals over time. Present Worth of an Annuity is denoted by P symbol.

How to calculate Present Worth of Annuity using this online calculator? To use this online calculator for Present Worth of Annuity, enter Annuity (A), Discrete Compound Interest Rate (i) & Number of Interest Periods (n) and hit the calculate button. Here is how the Present Worth of Annuity calculation can be explained with given input values -> 2723.248 = 1000*(((1+0.05)^(2)-1)/(0.05*(1+0.05)^(2))).

FAQ

What is Present Worth of Annuity?

The Present Worth of Annuity, often denoted as is a financial metric that represents the current value of a series of equal cash flows or payments received or paid at regular intervals over time and is represented as P = A*(((1+i)^(n)-1)/(i*(1+i)^(n))) or Present Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate*(1+Discrete Compound Interest Rate)^(Number of Interest Periods))). Annuity is a financial product or arrangement that involves a series of periodic payments or receipts made at equal intervals, Discrete Compound Interest Rate rate refers to the interest that is calculated and compounded at specific, discrete intervals during a given period, rather than continuously & The number of interest periods, often denoted as n, represents the total count of compounding periods within a specified time frame for an investment or loan.

How to calculate Present Worth of Annuity?

The Present Worth of Annuity, often denoted as is a financial metric that represents the current value of a series of equal cash flows or payments received or paid at regular intervals over time is calculated using Present Worth of an Annuity = Annuity*(((1+Discrete Compound Interest Rate)^(Number of Interest Periods)-1)/(Discrete Compound Interest Rate*(1+Discrete Compound Interest Rate)^(Number of Interest Periods))). To calculate Present Worth of Annuity, you need Annuity (A), Discrete Compound Interest Rate (i) & Number of Interest Periods (n). With our tool, you need to enter the respective value for Annuity, Discrete Compound Interest Rate & Number of Interest Periods and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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